Metro Incomes Rise, But Inequality Remains Stubborn

In 2016, incomes in the largest U.S. metros rose and poverty levels dropped compared to the previous year. But inequality persisted.

Across U.S. metros, median income climbed 2.7 percent to $60,542 in 2016—that’s slightly higher than the national median of $59,039. According to American Community Survey numbers released Thursday, 21 of the 25 most populous metros saw increases; none saw declines. Poverty rates also fell in 17 of these metros.

Among these metros, there’s quite a bit of variation. At $96,667, the San Francisco metro had the highest median income, whereas Tampa had the lowest at $51,115. In general, large metros in the South tended to have lower incomes and higher poverty levels.

CityLab’s Soren Walljasper created the map of incomes and poverty rates in the 25 most populous metros using this newly released Census data. The larger the bubble around the metro, the higher the median income; the warmer its color, the higher the poverty rate:

(Soren Walljasper/CityLab)

One important thing to note: The poverty rates for the entire metro area may obscure the concentrated poverty within city limits.Only 8 percent of residents in the D.C.-Maryland-Virginia metro area, for example, are below the poverty line. In D.C. alone, that share is above 18 percent. For context: the national poverty rate in 2016 was 12.7 percent.

Generally speaking, these local trends correspond with the national trends, per the Current Population Survey that the Census released earlier in the week. For the second consecutive year in 2016, the nation saw a hike in median incomes—this time, by 3.2 percent. The official poverty rate dropped 0.8 percent. “We are definitely pulling ourselves out of the deep hole of the recession,” Elise Gould, a senior economist, at the Economic Policy Institute, said in a press call.

As new jobs have been created over the last couple of years, economic gains have started to trickle down to groups that were previously locked out of recovery. The racial and gender earnings gaps have started to narrow. The Supplemental Poverty Measure (SPM), which takes into account incomes from government benefits like Medicare and food stamps, shows that these programs have been immensely helpful in keeping Americans out of poverty. Still, economists caution against getting too excited, pointing out that 2016’s income growth has been slower than the previous year and unevenly distributed. And even with the strides, the average American isn’t faring better than she was a decade or two ago.

It’s important to note that the Current Population Survey, on which these national numbers are based, altered its income questions in 2014. So it’s not possible to make an apples-to-apples comparison with the income data going back before that. EPI corrected for this change in their analyses, however, and found that median income is still 1.6 percent below 2007 and 2.3 percent below 2000 levels.

Point is, for the American middle class, it hasn't just been a lost decade. It's pretty much a lost two decades. An urgent economic crisis.

Folks in the middle class saw more money in their pockets starting during the second half of the Obama administration. But it’s clear that the richest Americans have seen the highest gains in the recovery. The median incomes of the top 5 percent climbed8.7 percent higher than they were in 2007. Incomes of the lowest fifth, on the other hand, were still 2.7 percent below pre-recession levels. “Much of the distribution has not recovered from the Great Recession,” Gould said. Inequality shows no signs of easing up.

The Gini index summarizes inequality.
Pessimists reading: It just keeps rising over time!
Optimist: It barely moved over the past few years. pic.twitter.com/o3ZwtrWOOL

The local data released Thursday show that unequal economic conditions are pretty spread out: most states experienced no change in the inequality between 2015 and 2016. In Louisiana, West Virginia, and Wisconsin, it got worse. “This report is a sign of sunshine, with a few clouds,” EPI’s Gould said on Tuesday. That conclusion, as it turns out, holds true at the state and local level as well.

About the Author

Tanvi Misra is a staff writer for CityLab covering immigrant communities, housing, economic inequality, and culture. She also authors Navigator, a weekly newsletter for urban explorers (subscribe here). Her work also appears in The Atlantic, NPR, and BBC.